Business Cycle Co-movement and Trade Intensity in the Euro Area: is there a Dynamic Link?
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Marcus Kappler
Summary
This paper extends the recent literature that exclusively looks at the static link between bilateral trade intensity and business cycle synchronisation. A cross section augmented VAR framework with an unobservered common factor structure is used in order to apply the concept of Granger causality to test for dynamic links between variables. I conclude that although countries with intensive trade linkages also tend to have more similar business cycles in the long-run, the trade channel does not help to explain much of the short-run variation of business cycle co-movement in the euro area. The common factors have high predictive power for both business cycle co-movement and bilateral trade intensity. Thus, the paper provides evidence for the common shock view on business cycle synchronisation.
© 2011 by Lucius & Lucius, Stuttgart
Articles in the same Issue
- Inhalt / Contents
- Abhandlungen / Original Papers
- Poverty in Germany – Statistical Inference and Decomposition
- Ein-Euro-Jobs und reguläre Beschäftigung / One-Euro-Jobs and Regular Employment
- Business Cycle Co-movement and Trade Intensity in the Euro Area: is there a Dynamic Link?
- Wie hat sich die intragenerationale Umverteilung in der staatlichen Säule des Rentensystems verändert? / Has Intragenerational Redistribution Become Less Important in Pension Systems’ Public Pillar?
- Diskussionsbeitrag / Discussion Paper
- Kosten des Europäischen Finanzstabilisierungsmechanismus (EFSM) aus deutscher Sicht / The Costs of the European Financial Stability Facility (EFSF) – The German Point of View
- Literaturbeitrag / Review Paper
- Fortgeschrittene Evolutorische Ökonomik / Advanced Evolutionary Economics
- Buchbesprechungen / Book Reviews
Articles in the same Issue
- Inhalt / Contents
- Abhandlungen / Original Papers
- Poverty in Germany – Statistical Inference and Decomposition
- Ein-Euro-Jobs und reguläre Beschäftigung / One-Euro-Jobs and Regular Employment
- Business Cycle Co-movement and Trade Intensity in the Euro Area: is there a Dynamic Link?
- Wie hat sich die intragenerationale Umverteilung in der staatlichen Säule des Rentensystems verändert? / Has Intragenerational Redistribution Become Less Important in Pension Systems’ Public Pillar?
- Diskussionsbeitrag / Discussion Paper
- Kosten des Europäischen Finanzstabilisierungsmechanismus (EFSM) aus deutscher Sicht / The Costs of the European Financial Stability Facility (EFSF) – The German Point of View
- Literaturbeitrag / Review Paper
- Fortgeschrittene Evolutorische Ökonomik / Advanced Evolutionary Economics
- Buchbesprechungen / Book Reviews
